What is BLR(Base lending rate in banks)

 BLR or Prime Lending Rate is the optimum rate of lending of a bank. The loans given by the bank are with respect to this PLR (depending upon the risk).

Say PLR of a bank is 12%. Then a loan will be represented by something like +2% over PLR, meaning the lending rate will be 14%. Thus if PLR goes down to say 10% then the interest on that loan will to go down by 2% to become 12%.

You can also go through a good presentation created by me to explain the loan appraisal process by banks https://dalaal-street.com/bank-loan-insight/ .

Hope that helps.